In July 2025, a bipartisan coalition of 32 state and territorial attorneys general (AG) sent a letter to Congressional leaders urging the passage of the Secure and Fair Enforcement Regulation (SAFER) Banking Act. Their letter emphasizes that the legislation — a long-stalled federal reform — would provide legal clarity and a safe harbor for banks and financial institutions to serve state-licensed cannabis businesses. Such clarity, they argue, is urgently needed to address public safety risks and to improve the states’ ability to regulate and tax the booming cannabis industry.
The SAFER Banking Act: Legal Clarity for Ancillary Businesses
The core impetus behind the SAFER Banking Act lies in the array of problems caused by forcing a multibillion-dollar industry to operate on an almost entirely cash basis. Nearly 75% of Americans now live in a state where cannabis has been legalized in some form, and legal retail cannabis sales in the U.S. reached more than $30 billion in 2024 (up 4.5% from 2023). Yet, because of marijuana’s status as a federally controlled substance and associated federal banking restrictions, state-licensed cannabis companies today have limited or no access to traditional banking, resulting in an overwhelmingly cash-based industry. Legitimate cannabis entrepreneurs are often forced to pay employees and vendors in cash, store cash in vaults or off-site, and even pay taxes by hauling bags of currency to government offices. The cash-only mandate therefore not only creates a host of public health and safety concerns, but also undermines regulatory oversight and tax collection.
The SAFER Banking Act is designed to shield banks, credit unions, insurers, and other financial service providers from liability for simply providing traditional business services to state-sanctioned cannabis companies. In essence, it would create a “safe harbor” in federal law so that these ancillary businesses cannot be penalized for offering deposit accounts, loans, insurance, payment processing, and other services to legitimate cannabis-related businesses in jurisdictions where cannabis is legal. By providing a clear statutory safe harbor, the SAFER Banking Act aims to integrate state-legal cannabis commerce into the mainstream U.S. financial system. Importantly, the act does not encourage or facilitate the legalization of cannabis at the state or federal levels, and would not mandate cannabis sales in states that have chosen to keep the drug prohibited.
The push for cannabis banking reform has been building in Congress for nearly a decade. The original Secure and Fair Enforcement (SAFE) Banking Act was first introduced in the late 2010s and garnered broad bipartisan support, passing the U.S. House of Representatives multiple times (often by large margins) between 2019 and 2021. These earlier bills, however, ultimately stalled in the Senate. In 2023, lawmakers re-tooled and reintroduced the bill in the 118th Congress with some enhancements — rebranding it as the “SAFER” Banking Act. The extra “R” in the name signifies an added focus on regulation, and reflects additional provisions to extend protections to ancillary services like insurance and payment processors, and to reinforce requirements for financial regulators to serve all legal businesses fairly.
A Broad Bipartisan Coalition: 32 AGs United
One of the most striking aspects of the July 2025 letter is the breadth of its support among the nation’s top state law enforcement officers. Signatories include the AGs of states with established cannabis markets like California, Colorado, Illinois, and Maryland, as well as conservative-leaning states like Georgia, Ohio, Oklahoma, South Dakota, and Utah. This diversity underscores that access to financial services is not a partisan issue.
As their state’s chief legal officers, AGs are charged with upholding the law and protecting public health and safety. Their collective voice sends a powerful message to Congress that the status quo is failing at the state level — creating unsafe conditions and legal ambiguities — and that federal action is urgently needed to reconcile banking laws with state cannabis laws. This is not the first time state officials have sounded the alarm, as state AGs have sent multiple letters over the years urging federal cannabis banking reform. In May 2019, a bipartisan group of 38 AGsurged Congress to pass the original SAFE Banking Act, citing the public safety hazards of a cash-only industry. More recently, in September 2023, 22 state AGs wrote to Congress in support of the SAFER Banking Act as it advanced through the Senate Banking Committee. Such a broad consensus among state law enforcement leaders, from states with and without legal cannabis, highlights that this issue transcends typical political divides. The AGs collectively recognize that, regardless of a state’s stance on legalizing cannabis, refusing legitimate businesses access to banking serves no one — licensed businesses, regulators, law enforcement, or the public.
Why It Matters
For state-licensed cannabis companies, the stakes in this legislative effort could not be higher. These businesses, which now support more than 425,000 American jobs and counting, have been operating at a severe disadvantage by being denied access to basic banking services that other industries take for granted. The lack of access to checking accounts, electronic payments, lines of credit, and financing not only increases operating costs and security risks, but also hampers the industry’s ability to expand as a bona fide part of their state economies. The SAFER Banking Act promises to finally bridge the gap between federal law and the reality in more than 40 states and territories by removing the cloud of illegality from banking transactions with cannabis businesses.
The unified call to action by 32 AGs signals that state law enforcement leaders see this as a critical public safety issue, not a partisan or ideological question. Their letter makes clear that maintaining the status quo “presents a considerable safety issue for the public” and undermines state oversight. In their view, providing a federal safe harbor for cannabis banking is a pragmatic step that will make communities safer and governance more effective, without endorsing or expanding cannabis use in states that haven’t chosen to legalize.
Our Cannabis Practice provides advice on issues related to applicable federal and state law. Cannabis remains an illegal controlled substance under federal law.